This mechanism, first used in a 2012 transportation bill, allows companies to temporarily defer contributions to employees’ defined-benefit pension plans. Companies save money in pension contributions and pay more in taxes up front, temporarily increasing federal revenue. But when companies eventually make up the missed pension payments, plus interest, tax revenue declines. Read More »

Some of the loudest protests over the new budget deal were coming from businesses that still offer traditional pensions to their workers.

That’s because the budget deal includes a significant new increase in the premiums these firms must pay into a federal pension safety-net program – and that’s on top of another premium increase they were hit with last year, as part of another congressional budget deal.

The latest increase amounts to about $7.9 billion, making it one of the bigger changes in the $85 billion deal announced Tuesday night. A transportation-funding bill passed by Congress last year tapped pension-paying businesses for about $9 billion. The changes are officially described as reductions in government direct spending — but the money’s coming from businesses. Read More »

American Federation of Teachers President Randi Weingarten said the bankruptcy court ruling that Detroit is eligible for bankruptcy protection is morally and legally troubling, and her union will be part of an appeal.

U.S. Bankruptcy Judge Steven Rhodes’s Tuesday ruling dealt a major blow to unions, which had argued that pension cuts are protected by a provision in Michigan’s constitution. During his 90-minute presentation outlining his ruling, Judge Rhodes said the power of the federal court superseded that state provision…. Read More »

Organized labor, angry that Detroit’s bankruptcy filing could cause thousands of union members to lose their pensions, is turning to the White House and Congress for help.

The AFL-CIO issued a statement Thursday night that called on President Barack Obama and Congress “to commit to an immediate infusion of federal assistance for Detroit, and to demand” it be matched by the state of Michigan.

The group, which is the largest union federation in the nation, said retirees put in decades of service to earn “a modest pension of about $19,000″ a year, and alleged ”it is not only illegal but morally wrong to attack Detroit’s seniors.”… Read More »

WASHINGTON–Utah Sen. Orrin Hatch, the top Republican on the Senate Finance Committee, will outline a plan Tuesday to ease financial strains on state and local governments by revamping public-pension rules.

States and local governments nationwide have targeted public pensions for cost-cutting after funds struggled through the recession, which brought budget cuts and a backlash against public-employee compensation.

Mr. Hatch plans to introduce a bill that would allow governments to invest in annuity contracts with state-licensed insurance companies. The annuities would pay a guaranteed benefit, but the risk would be borne by insurers, rather than governments. Read More »

Add 401(k) groups to the list of those trying to block certain changes to the tax code as part of the deficit-reduction talks.

American workers can contribute pre-tax earnings to retirement savings in 401(k) and other investment vehicles. but the American Society of Pension Professionals & Actuaries on Monday launched a campaign warning that those tax breaks could be on the chopping block as part of the deficit-reduction talks.

Its campaign, “Save my 401k, Protect My Piggy” says Democrats and Republicans could decide to limit or end the retirement savings tax break in order to reduce the deficit. Read More »

President Barack Obama’s pension from his days as an Illinois legislator made an unexpected cameo appearance, in disguise, at Tuesday night’s debate.

In response to Mitt Romney’s pledges to get tough on China, Mr. Obama attacked the GOP nominee over his personal investments in Chinese companies. The president also cited news reports that Mr. Romney’s company – presumably Bain Capital – “invested in what were called pioneers of outsourcing.”

“Governor, you’re the last person who’s going to get tough on China,” Mr. Obama said. Read More »

CHICAGO–Wisconsin Gov. Scott Walker took his state’s rivalry with Illinois to a new level Wednesday, poking the Land of Lincoln directly in the eye after a rating agency downgraded its debt.

“There could not be a more stark contrast between Wisconsin and Illinois,” the Republican governor’s statement said. “Political leaders in Illinois kicked the can down the road, raised taxes, and ignored fiscal realities. Now, they’re realizing the consequences of their actions: credit downgrades and negative outlooks.”

Kelly Kraft, a spokeswoman for Illinois Gov. Pat Quinn, a Democrat, said the state has had its fair share of mismanagement over the decades, but her boss is now trying to fix the problems and needs Republicans who can make tough decisions. She also couldn’t help but mention the energy and aerospace company Woodward Inc., which last week turned down repeated invitations by Mr. Walker to stay in Illinois, she said. Read More »

Californians go to the polls Tuesday to vote on a cigarette tax increase, and will also decide a number of other closely watched races. Polls close at 8 p.m. Pacific/11 p.m. Eastern.

Here’s a rundown of key contests:

CIGARETTE TAX: The highest-profile ballot item in California is a proposal to raise the state cigarette tax by $1 a pack. Known as Proposition 29, the measure would boost California’s cigarette tax to $1.87 a pack from 87 cents. The added revenue would fund research into cancer and other tobacco-related diseases, along with prevention and education programs. While a cigarette tax to fund health research isn’t uncommon nationwide, California’s is unusual in that it will be on the ballot. Most such cigarette taxes are passed by a state legislature and signed by a governor, with lobbying taking place largely behind closed doors. Read the Journal’s recent analysis.Read More »

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Washington Wire is one of the oldest standing features in American journalism. Since the Wire launched on Sept. 20, 1940, the Journal has offered readers an informal look at the capital. Now online, the Wire provides a succession of glimpses at what’s happening behind hot stories and warnings of what to watch for in the days ahead. The Wire is led by Reid J. Epstein, with contributions from the rest of the bureau. Washington Wire now also includes Think Tank, our home for outside analysis from policy and political thinkers.